ELEANOR SEGGIE: With us today is Ceri (Ceridwen) Mongie, director of Talent Solutions at CEB South Africa. She will be explaining the challenges and importance of leadership. Welcome, Ceri. Could you tell our listeners a bit about yourself and your background and give us a short introduction to CEB?
CERI MONGIE: My background is mainly in industrial psychology – I’m a qualified industrial psychologist but I started working at CEB about 11-and-a-half years ago and my focus and my engagement in working for CEB is really around the difference we make in people’s lives.
As a company: CEB’s] main focus is in terms of best practice, insight and technology, and that’s largely who we are as a company. So we basically help about 20 000 senior leaders every year to make changes within their business to ensure that they have successful businesses and that they can respond to changes in the environment and so on, basically through helping them to effectively manage their talent, their customers and their operations so as to achieve their objectives. So that’s where my passion lies and where I’m really interested in helping change people’s lives.
Planned strategic change failures
ELEANOR SEGGIE: That’s really interesting. Ceri, according to your research why is it that most planned strategic changes fail?
CERI MONGIE: What we found in our research is that typically most large organisations have undergone at least five enterprise changes in the last three years – that’s pretty significant and those are large changes. Things like mergers and acquisitions, restructuring, new leadership teams – so it’s not small changes that are going to have very little impact. The challenge that we found in our research is that, as you said, these changes are failing, they are not being implemented correctly.
The main reason that we’ve identified for that is that up to 82% of the executives don’t believe that they have the right talent in their business in order to enable the change.
However, when we speak to the talent and we speak to the employees of the business they have a different view on it and their feeling is that the change is pushed down from the top. So you have your leadership teams who put together the vision, the strategy and the change that needs to take place and that basically gets cascaded and communicated down and then the employees are just expected to adapt to that and to change.
What’s compounding on that is that we know that 73% of organisations are expecting more change initiatives in the next three years. So changes are happening, they are not being successful – we know more changes are coming – the world is constantly changing and the industry is constantly changing and now employees are not changing with it, and it’s not because they are not willing to change; it’s because they don’t know how they are expected to change.
So what our research shows us is the employees get told they need to change but they don’t know how and so only 26% agree that they’ve actually changed their own behaviour, and the way in which they work, in order for the change initiative to be successful. So obviously that will impact on the bottom line; companies are not being successful anymore, even though they expect huge success after a change initiative.
So one of the main solutions for that is to look at something called ‘open source change’. The focus of open source change is really on collaborating with the employees and with the talent within the organisation to do the change initiative together … so getting input from the rest of the business, working together, building teams that are going to drive the change initiative. To get buy-in, to get collaboration and to understand really what’s happening at the employee level because senior leaders assume that this is how employees are going to respond to the change – these are the changes that are required for them to be successful and they are turning around and saying ‘no, sorry, that’s not what’s required’.
So through open source change and collaboration it’s important that they then build the plans together, build the change strategies together. It’s not to say that everyone is capable of change or wants to change, so an important part of that is obviously identifying who has the capabilities, who wants to work in those collaborative teams, who want to help build the strategy, make the changes happen and that leads to much more successful changes. It reduces the amount of time that people spend through the change process; the changes are so much more successful, so the business doesn’t lose as much money during the change programmes and change initiatives because they can pick up on the problem so much quicker and fix those.
ELEANOR SEGGIE: It’s quite an innovative solution. Which professions do you find seem to have the greatest demand for skilled suitable business leaders?
CERI MONGIE: I think it’s across most professions. The demand particularly that we are noticing more and more these days is in areas such as technical types of professions. So areas such as software developers, industrial engineers, a lot of roles within the finance space – so it’s roles that require people to be quite comfortable with the technology and all the changes in technology and with data analytics, that’s becoming a huge requirement. So that’s where we are really noticing that there’s a critical gap in terms of talent.
And so what’s happening is that because the talent is not coming in, it’s obviously affecting the leadership pipeline and the succession planning and that’s to your point around the leadership and the professions where we are seeing gaps.
Reasons for the talent shortage
ELEANOR SEGGIE: There seems to be quite a lot of competition in a limited talent pool if companies choose to recruit, to go that route. What are some of the reasons for the lack of suitable and available talent?
CERI MONGIE: There are a couple of reasons for that. Maybe to just give a bit more background to the gaps in the talent space and so on,
…if we don’t start to understand what’s impacting on the talent and the shortage of talent, should I say, it’s going to start to lead to salary wars and it’s going to start to lead to hyper-competition between different organisations.
What companies typically do is they look at their competitors within their own industry and so they start to look at why is one finance institution competing with another finance institution, for example, for talent and what are they doing to get the better talent? If you look at the types of roles where there is a shortage in talent, it’s across industries. So very often banks, for example, it’s assumed that they don’t employ engineers but they do. There are a lot of engineers working in the banking environment. So when organisations look at their competition they make it very narrow in terms of looking at where they need to be sourcing talent from. So that’s one of the things: is to broaden the areas in which they are looking for talent.
It’s also important to start to look at the brand and the way in which an organisation positions themselves, so that’s also quite key. So, for example, things such as location, the industry: there are some industries that are just not attractive and appealing to people. Probably less so in the finance space that we are specifically looking at today, but if you look at some of the mines, for example, people don’t want to go and work out in Rustenburg; they want to be in Sandton; they want to be in the hub; they want to be central – especially young people. They leave university and they want to stay where there’s a social life and so on; moving out to a mine is not so appealing to them. So there are small things like location, industry, the type of industry, the size of organisations and so on. So that obviously limits the talent pool quite a bit.
Then we also find that candidates aren’t just that eager to apply for jobs – they want the jobs to come to them. We find that 44% of candidates indicate that they would welcome direct contact from recruiters and they are happy to put on their LinkedIn profile their education and their experience and so on, but in terms of actually making that effort to phone the company and say ‘I’d like to come and meet you, I’d like to see what you do, yes, I’m prepared to travel for an interview or to complete some online assessments’ or whatever the recruitment process looks like – that’s dropped significantly. They want people to deliver it to them and so that also has an impact on why there is a shortage of talent.
Then obviously lack of supply. We know that there’s a skills shortage in South Africa and it’s interesting that it’s not only in South Africa, – so even in America we are finding now that there are [fewer] and [fewer] people studying science and maths, and going into those types of subjects and degrees that industry is looking for. So it’s not only a South African problem…. But if companies aren’t being successful, they’re not growing and then they are not employing and developing more talent….
Then I guess the last main reason is the overspecificity that hiring managers expect. So when they speak to HR and say ‘this is what I want’, they kind of expect this absolute perfection that they are going to get, this absolute ideal. So they get very, very specific and they look for things that you may not find in one person.
There is also an American example where in San Francisco there are approximately 22 000 data scientists in the area with three- to seven years work experience. That doesn’t sound too bad, but when you look at the additional qualifications that these data scientists need and the additional system knowledge and programming knowledge that they need, it reduces it down to 60 people.
So you’ve got 22 000 people who’ve got the skill but we make it so narrow and we want it so specific. We’ve got a client in the finance space in South Africa, who when they run their grad recruitment programme they no longer look at how you’ve performed in your academic degrees, they look at it later on in the recruitment process. But in your typical graduate programme, organisations will screen out if you didn’t get an average of C, for example, for your degree, even B sometimes. So what you are getting is people who are really good at academics; they are not necessarily good at being in the working world; they don’t necessarily have the behaviours and the competencies that are required in the working environment. Can they study a textbook, write a good exam? Yes they can.
So what one of our clients in the finance industry is actually doing is their initial screening is: ‘do you have a degree’ or ‘will you have a degree by the end of the year’, not ‘did you get an A or a B’. Then they look at their behaviours and their competencies and everything else that’s required for the job and required to be successful within that specific organisation. Only later on do they start to look at academics.
So they found that where they previously had removed potentially a whole lot of candidates because they were being so narrow by only looking at candidates who had As and Bs, they’ve now broadened that candidate pool. They’re getting great talent into the business, not focusing purely on the academic.
So the moment we broaden the pool in which we are looking for the talent we can get in great talent. Skills can be taught, knowledge can be taught. The types of behaviours, the drive, the ambition, the behaviours required for change agents that we spoke about just now – those things are more difficult to teach.
So if you are looking for those types of behaviours, you can broaden your talent pool and then there’s a greater chance of bringing in great talent.
ELEANOR SEGGIE: It’s more of an innate behaviour or characteristic. Just to take you back a step, why do you find that jobseekers currently are adopting this entitled, come-to-me approach?
CERI MONGIE: …we always talk about the different generational groupings and so on – I think it is partly that. But it’s also partly because millennials want things given to them … it’s also partly that they don’t want to go through the effort if they don’t see the value in going through quite a stringent recruitment process. What’s happening is on average most people who are leaving university apply for about five different jobs – not necessarily knowing whether they want to work for that company or whether they want to do that specific role – but they send their CV out and they apply on the different online applications.
So what happens is that recruiters then spend a lot of their time on people who are not even that engaged in the process and by doing that it extends the recruitment process. So then the candidates get frustrated, they want feedback immediately, they don’t want to apply today and in four months’ time still not know if they have got the job. They want to apply today, do an interview tomorrow, do some online assessments, maybe do a second interview and they want to know that they’ve got the job. So because the process is being more and more delayed, because recruiters are so busy and getting inundated with candidates who don’t meet the requirements, … that also frustrates them.
Then it’s small things like technology. They want to be able to apply online; they want to be able to move through the process quickly and it needs to be efficient; it needs to engage them; it needs to be attractive; it needs to give them a realistic preview of what the job is about and of what the company is about without them having to phone the company or go and do the research. It must be there; it must be at their fingertips. So that’s also an important element to consider.
ELEANOR SEGGIE: We can be quite a demanding generation [laughing].
CERI MONGIE: And yet the millennials are the generation who are going to push the businesses into the next growth curve and where they need to be.
It’s interesting that millennials actually like to be coached by the older generations, by the baby boomers. They want to learn about the business from not someone who is two years older than them, but someone who is ten, 15, 20 years older than them.
Having said that, they can teach the older generations about the new technology and the new and exciting models, but the technology is changing so quickly that whatever you learn at school and university is outdated by the time you get your first job. There are so many different variables to look at, but it all speaks to efficiency and driving the process so quickly and being aware of the need to change – being proactive rather than being reactive.
ELEANOR SEGGIE: So there are definite advantages to dealing with millennials [laughing]. Given that, in the current market what approach should companies then take in sourcing talent?
CERI MONGIE: As I mentioned earlier, it’s very much around expanding the market in which an organisation is sourcing their talent from, but also looking at more of a needs-driven sourcing approach. So what I mean by that is understanding what the market can provide and aligning that to what the business needs.
So it’s really important for HR to speak to the specialist positions and the roles that they are wanting to fill and really understand what’s required within those organisations from a talent perspective. But understanding, as I said, what the market can deliver. So not overpromising and saying yes, we can find this perfect individual, who’s got every specific qualification, knowledge, skill, experience and so on that they are looking for, but being able to marry those two between what the organisation requires and what the market can deliver. So that’s what we mean by a needs-driven sourcing approach. Then there’s a much big pool, which obviously if you just look at straightforward maths, your selection ratio is that much bigger in terms of how many people are available for the different jobs.
So if organisations are more flexible in terms of the talent that they bring in and understanding what the market can offer and can provide, we see things like cost savings of up to US$1.8 million per 1 000 vacancies.
And, as I say, the recruiters are then focusing where they should be and not on all these people who don’t have the skills, don’t have the requirements or only focusing, like that example I gave of narrowing down from 22 000 to 60 people, and there are loads of companies wanting to employ those 60 people. So you just sit there with years of trying to recruit the right talent.
ELEANOR SEGGIE: $1.8 million? That’s incredible.
CERI MONGIE: It’s huge.
ELEANOR SEGGIE: … can you tell us what [a] talent-audit is and why companies should consider using them?
CERI MONGIE: We’ve spoken a lot about recruitment so far and sourcing talent, but obviously it’s important for organisations to understand the talent that they’ve got within an organisation. We’ve spoken about skill shortages. Organisations obviously want to retain their top talent, but they also want to know how strong their talent is, where do the strengths lie, where do the development areas lie?
So you’ll find that most organisations are quite comfortable doing financial audits and risk audits and technical audits and so on, but often the talent is forgotten about; the employees are forgotten about. It’s important to do audits on the employees as well, especially if the organisation is planning to go through some sort of change, which we know is inevitable. A talent-audit is really around identifying what a company requires, or a function within a company – it’s not necessarily the whole company. Identifying what the company requires now and looking long term in to the future – so what does the strategy tell us is going to be required of the talent?
Then to assess the current talent to see where are the strengths and where are the gaps, because then that can answer questions around what development is required to get the employees to the level that they need to be, or have the knowledge and the skills that are required to achieve the objectives and the strategy that’s been planned for the future. Also, it helps them to identify additional talent that they may need or the types of employees that they would need to bring into the business to help support the current staff that they have. Rather than just employing clones of each other, [seeing] what skills are missing and lacking and what additional skills do they need. So that’s really in a nutshell the summary of a talent-audit.
It’s really to identify our current picture, what do we have. From there they can focus on so many additional projects and objectives: so succession planning, identifying their high potentials, who their next leaders are within their business. So it’s really a snapshot of the current talent performance at a given point in time.
ELEANOR SEGGIE: Can you think of any examples of where this has been successfully used and what companies should be specifically using this type of approach?
CERI MONGIE: I think the easy answer is all companies, but it’s really in a space where there are some specific needs. So very often we notice if there is a new leadership team they are quite interested in doing a talent-audit, so that they can understand what the business looks like before and after mergers and acquisitions. So when you are trying to combine two teams together, for example, from two different organisations, what does that talent look like in the two organisations? Again, [asking] ‘where do our strengths lie’, ‘where do our gaps lie’ before an acquisition to see what does the talent look like. And then just in teams that …could be better or there is something missing but you’re not quite sure what. That’s why I say that it can be applicable to any organisation.
If you think about it, financial audits are done regularly; talent-audits can be done just as regularly. It gives such valuable information and that information can be aggregated. So then we start to look at trends and data and then we can also start to benchmark one organisation with competitors, with other organisations, to see how does our talent stack up, because that, again, impacts on an organisation’s competitive strength. If they’ve got the best talent then that really helps them to position themselves ahead of other organisations.
ELEANOR SEGGIE: I like the fact that it could potentially reignite passion in existing employees, without having to go out and search for the ‘perfect’ employee, as you said.
CERI MONGIE: I think that’s a very valid point. It shows an investment in the talent they’ve got; it creates engagement and we always encourage things like ongoing development once we’ve identified those development areas. Yes to your point, ‘the company is investing a bit in me, not in the new starters all the time’ and then the company and the individuals can see that return on investment; they can see their own improvement in their job. Obviously as each employee starts to improve, the company improves as a whole.
Enterprise and network leaders
ELEANOR SEGGIE: Ceri, what type of leadership is needed today? I know we’ve covered this quite a lot, but just in a succinct answer … and why is it important?
CERI MONGIE: More specifically today the type of leadership that’s required is what we term at CEB as an ‘enterprise leader’. And what an enterprise leader essentially is, is a leader who performs the traditional behaviours that we’ve all heard of: so the transactional competencies, the transformational behaviour. So you set the vision and the strategy and you implement that but the one challenge that is experienced with that, looking from a traditional view, is that it creates a very silo-type approach. So a finance director or a CFO is responsible for their finance function and that’s what they look at and that’s what they focus on; and the HR director sits in the HR space and they focus on that and so on.
If we look at what organisations are requiring going forward, it’s more of what we call ‘network leadership’ – so it’s that integration across silos.
This has been spoken about for years but leaders can no longer do it by themselves – they need that support of the other leaders. We all have strengths, we all have development areas, but if I work with my colleagues on my exco team to see where do their strengths lie, where do their developments lie? We can support each other, we can help each other out.
But the network then needs to be pushed further down into the organisation. So it’s important for employees to work as teams; it’s important for leaders to be able to introduce employees to each other where it adds value. So it’s not that the leaders are expected to make all the decisions any longer or have all the answers; it’s important that the leaders know that ‘if I get asked a question from one of my employees that I can’t answer, who can answer that question? How can I build that network? How can I get various individuals to network together to build a relationship in order to make a decision?’ So that’s the additional part to the transactional and transformational leadership competencies that are required.
ELEANOR SEGGIE: So it hopefully would develop or inspire leadership throughout the whole company then?
CERI MONGIE: It develops and it inspires leadership and it also has a significant impact on the bottom line. We see significant improvements in revenue and obviously in profit if leaders display enterprise behaviours, rather than working in the silo.
ELEANOR SEGGIE: What are some of the challenges you experience in succession planning?
CERI MONGIE: … the challenges there are really around identifying what’s required for the leaders, as we spoke about now. So knowing that we need network leaders: that’s required in organisations in the next few years and then how do we identify the talent required to move through that succession pipeline?
So, again, having that proactive approach to say we know in two, three, four years’ time there’s going to be turnover at the leadership level – that’s natural in any organisation – so how do we start to identify the talent today? The assumption is very often that if I’m good at my job today, I’m going to be good as a leader in the future. When we spoke about specialist-type roles – engineers, finance specialists and so on – it’s not automatic or natural that people want to become leaders or managers. It’s maybe that they want to stay in a specialist role.
So what organisations typically do is they focus very much on current performance predicts future performance and they assume that if you are currently performing well you are going to, therefore, be the next good leader and you get put into this succession plan or this high potential project, and then you actually don’t want to be there.
Succession planning is important both from the business perspective – to understand types of leaders, what the future looks like – but then to identify the right talent: people who are engaged; people who want to become leaders.
Then what do you do with those who don’t, the specialists, and engaging them? And that’s really the focus and the challenge around succession planning. We do it too late; we do it when we suddenly have to fill a role and we don’t always do it with the right people.
ELEANOR SEGGIE: So it should be more of an ongoing process?
CERI MONGIE: 100%. Succession planning should be ongoing, yes.
ELEANOR SEGGIE: Just lastly from my side, from CEB’s perspective what is predictive analytics and why is it a potential solution to these challenges?
CERI MONGIE: …analytics is used in many areas of business but, again, it hasn’t been used too much within the talent space. So [predictive analytics is] around understanding and collecting all the data that organisations have on talent: so performance data, assessment data, doing assessments for development, for recruitment. But it’s really around taking all that data, aggregating it and understanding what does that tell us about the business, and not only about our business but let’s compare it to other companies within our industry to see what does that tell us about us and our talent in relation to our competitors, in relation to other organisations.
It’s also looking at what companies are doing globally. So it’s looking at your own data, it’s looking at other information, other data and then using that to start to predict that, if our data looks like this and research data looks like something else, what do we need to do in order to get to there? [Going back to] the example I gave around the leadership – we know that companies require enterprise leaders, so let’s look at our current leadership team. Let’s see if we meet those requirements. No, we don’t, so what do we need to do to close that gap? So that’s really what we are looking at in terms of predictive analytics: what are we doing today, with the data that we have on our talent, to make decisions for the future.
ELEANOR SEGGIE: Again, quite an innovative approach and I’d imagine that shareholders would be quite interested in seeing that enacted in companies?
CERI MONGIE: 100%, because if you do it correctly and if you use that data, it doesn’t just sit on a system somewhere; [if] you actually use the data and unpack that data and what it means for you, we see significant improvements. You can implement solutions where you can actually quantify the return on investment. So, again, when you look at talent, very often it sounds like nice-to-haves; it’s not quantified. HR processes, plans that are put in place, succession planning, all those types of things, they sound like nice-to-haves – they are actually essential and if done correctly, using the data to support it, you can show the return on investment; you can show that your sales have increased; you can show that your employee turnover has decreased; you can show your increase in revenue, so you can quantify it. If you don’t use the data and you don’t use the information at hand and you just implement it because everyone else is doing it, it’s very difficult to quantify the return on investment of the project.
ELEANOR SEGGIE: Then onto our listener questions. What are your views on the importance of supervisors with regard to the execution of an organisation’s strategy? In this case supervisors being first-line leaders or team leaders – the lowest level in a triangular organogram.
CERI MONGIE: I think supervisors definitely have a very important role to play. I’ve already touched on it a little bit, so I’ll just quickly summarise. Supervisors, just the same as senior leaders, have to focus on network leadership: so that decision-making, working as a team, that needs to cascade down. It’s not only senior leaders who are responsible for everything. When we spoke about change we need to start including supervisors, employees, within that change space. Again, it’s not only the senior teams that need to cascade the change initiatives down.
But what is important, as I mentioned just now, [is] not everyone is going to be a supervisor. Not everyone is going to be the next CEO of the company. So often supervisors get made a supervisor because they are the person who has been in the team the longest, or they are the person who puts up their hand, instead of understanding what a supervisor role requires. So they are important but we need the right people in those jobs.
ELEANOR SEGGIE: Just lastly, do you find that the challenge of identifying real talent is sometimes hidden when an incompetent leader is appointed? Is this the norm in South Africa?
CERI MONGIE: I can’t say that it’s necessarily the norm in South Africa, but I think it could be a problem. I’m not directly answering the question, but the challenge that we sit with very much in the traditional HR space and the talent management space is that we don’t – and I say ‘we’ very broadly (a lot of HR executives are getting better at this) – but we don’t speak the business language; we don’t show the return on investment; we don’t show the value; we don’t show how that change initiative or that succession plan or that high potential project or whatever, actually has changed and made the business more successful. So what happens is leaders don’t consider talent the same way they do finance or sales or any other area of the business, because they don’t see the value in it.
So the moment we can start to show the value, the moment leaders will be more open to seeing the value in the talent.
ELEANOR SEGGIE: It’s fascinating. Ceri, thank you so much for your time today, it’s been really interesting.
CERI MONGIE: It’s a pleasure.